When will the AI bubble burst? Watch for this one signal
AI stocks continue marching higher in 2024.
Nvidia (NVDA) is already up 82% YTD (I took some profits recently).
SoundHound AI (SOUN) jumped 178% YTD.
And Super Micro Computer (SMCI) surged 255% YTD.
No wonder investors are starting to call the AI market a bubble. Some are even predicting an outright crash.
I disagree. The AI bull market is far from over.
This signal will tell me exactly when the AI bubble will burst . I call it the “IPO” curse.
I’m struck by how many times the leading company in a hot sector has gone public and marked “the top…”
- The AOL-Time Warner merger in 2000 — still the largest ever — culminated in the dot-com bust.
- The Blackstone (BX) IPO in 2007 coincided with the top for financial markets and preceded the Great Recession.
- Glencore’s (GLNCY) 2011 listing marked the peak in the commodity super-cycle.
- Coinbase’s (COIN) IPO looks like it marked a top for crypto.
There are many fast-growing private AI companies — OpenAI, Figure AI, Anthropic,... Which will eventually go public.
We’re at least a year away from a high-profile AI IPO. This tells me the AI trend has more room to run.
For now, we expect 2024 to be AI’s breakout year for AI stocks. We want to continue betting on the winners — especially companies raking in cash from the AI infrastructure spending boom.
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